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John Petro

Developers Need Community Support, Communities Need Affordable Housing

New York City's neighborhoods are pockmarked with stalled residential developments. But the pause in construction will most likely be a temporary one. People are still moving to New York--despite the recession--and hundreds of thousands of new housing units will need to be built before supply catches up with demand. The city estimates that we need 265,000 new units by 2030 just to keep up with population growth.

But neighborhood opposition to new development could stall future development in New York City more than the credit crisis. Community members have seen the effects of new luxury development in their neighborhoods: rising rents, gentrification, and displacement. Based on their experience, residents understandably resist rezonings and new condo towers. City Hall must understand that without concrete community benefits, an attempts to increase the pace or scale of new development will be blocked.

This would be a lose-lose situation for both city residents and developers. If not enough new units are built, the city's already jaw-dropping housing prices will only go higher. And if new development only caters to the luxury class, neighborhood residents will fight against any new rezonings and new projects, closing off vast swaths of the city to new development; no new development, no profits for developers.

Mayor Bloomberg has used the prospect of new affordable housing in order to gain community support for new neighborhood rezonings. In 2005, after fierce neighborhood opposition to a proposed rezoning of Williamsburg and Greenpoint, the mayor beefed up the percentage of new units that would be affordable, from 23 percent to 33 percent. In Coney Island earlier this year, the city promoted the addition of new affordable housing as a key selling point for its rezoning plan.

Unfortunately, the city has not been able to live up to its promises. In order to create the affordable housing, the city created a new Inclusionary Zoning program. Inclusionary Zoning is the requirement that developers set aside a certain percentage of the units in a new development as affordable units. But the city relied on voluntary Inclusionary Zoning, in which developers can opt into the program in exchange for the right to build taller and denser buildings.

A recent investigation by the Gotham Gazette found that since 2005, only 768 affordable units have been created in Williamsburg and Greenpoint through the city's Inclusionary Zoning program, a far cry from the 3,500 Bloomberg promised over four years ago. While the housing bubble and the financial crisis can be partially blamed for the slow pace of affordable housing construction, anecdotal evidence suggests that many developers are opting out of the city's Inclusionary Zoning program.

This is why the city needs to make the inclusion of affordable units mandatory. By making the program mandatory, developers will be more likely to build to the highest possible density. This promotes economic development (more construction jobs), helps the city address the severe housing shortage, and creates affordable housing opportunities. Mandatory Inclusionary Zoning would also mitigate neighborhood opposition to new rezonings. Instead of vague promises of affordable housing that might be created, residents will know that for every four new housing units, at least one will be affordable. Since developers clearly have an interest in opening up more of the city to new development, mandatory Inclusionary Zoning would ultimately be in their best interests.

Once credit begins to flow freely once again, there will be a demand for more development opportunities throughout the five boroughs. Whether or not community groups greet developers with open arms or with lawsuits depends on the city's ability to ensure that neighborhood residents see the benefits of new development. Without stronger guarantees of affordable housing, it is likely that residents will try their hardest to keep new development out of their neighborhoods.

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Posted at 4:25 PM, Oct 07, 2009 in Housing | Urban Affairs
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